A Conversation with T. Boone Pickens

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In July 2008, oil tycoon T. Boone Pickens launched a $58 million national campaign to promote the “Pickens Plan,” a U.S. energy policy proposal that calls for increased use of domestic energy products such as wind and natural gas. Mr. Pickens says his plan would lower U.S. dependence on foreign oil by more than fifty percent over the next ten years. Please join T. Boone Pickens to discuss U.S. energy policy and the future of his plan.

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FRANK SESNO: Good evening, everybody. Welcome to the Council on Foreign Relations. I'm Frank Sesno, your tour guide and very honored moderator this evening. And it's always a good idea to agree to preside an event -- at an event at the Council on Foreign Relations when you know the person that you're appearing with will pack the house.

Welcome to T. Boone Pickens, and welcome to today's Council on Foreign Relations meeting. May I ask, by way of starting, for everybody in the room to please turn off -- not merely mute or vibrate, your cell phones, BlackBerries, various wireless devices, to avoid creating interference with the wireless sound system. So, it's a little bit like flying on a plane, we want it to land safely so we obediently turn our devices off, and we'd ask you to do the same.

I'd also like to welcome some 150 Council members who are joining this discussion this evening via teleconference, so we thank you for being with as well. And as a reminder to everyone, and especially T. Boone Pickens here, this event is on the record, so we will be doing that for all times.

So, welcome to Washington.

T. BOONE PICKENS: Thank you.

SESNO: You have had a visit --

PICKENS: I feel like I'm living here. (Laughter.)

SESNO: (Laughs.) Well, I turn on the radio and I hear you. I turn on Larry King and I see you. I turn on the Energy summit and there you are. What are you trying to accomplish here on this visit, and -- (laughter) -- more broadly? You've been here before.

PICKENS: You know, I launched the Pickens plan on July 8, 2008. And the reason I did it is my wife, in the middle of the night -- it was about probably the middle of June, maybe the first of June, but anyway I kept harping about that nobody -- you know, now we're in the campaign and all, and I said neither candidate is talking about energy. And I said, this is the most important item that we can talk about, would be energy. And I said I really think it needs to be elevated into campaign dialogue.

And so she would, from time to time, say I think you're right, you know. Why not, I mean, she kind of agreed with me -- (laughter) -- and so -- on that point. So, finally I got so frustrated because I had followed presidential campaigns for years, and if you go back to '70, Richard Nixon said at the end of that decade of the '70s, "We won't be importing anymore foreign oil." And at that point we were importing 24 percent. At the end of the decade we were importing 28 percent. So, wrong.

And then from Nixon forward, everybody -- Democrat or Republican would say, like me, and we'll be energy independent, as if it was just going to happen like that. And never did I ever see anybody question a president about, "You said, back two years ago, that we would be energy independent, and, in fact, we're even more dependent after two years of you being president than we were when you said we'd be energy independent." "How are you coming along on your" -- "when are we going to get energy independence?" Nobody said it.

And, you know, once you get rabbit ears on something like that, you know, you say, is anybody going to ever ask one of these people "When will we be energy independent?" So, as it unfolded I became more and more frustrated, and gave my wife a cauliflower era listening to me -- (laughter) -- on what should happen, and you know, "why don't they;" and everything else.

And then I had the experience of the Dole campaign in '96. And he said, "Will you be the Texas chairman for me?" And I said I will if I can be adviser on energy. "Of course. You know more about energy," and bla-bla.

So, what it means, you know, to be chairman is raise money. And so I raised the money and helped in every way I could, and nothing was ever mentioned on energy. So, finally, we were together and had some time and I said, let's talk a little bit about energy, what do you say? And he said, "Sure. Go ahead." And so I went through my spiel on energy.

But, I did -- I was early, and that was in the '96 campaign, and I told him, I said, if you win twice here, you will be neck-deep in energy problems, because I thought it was coming in 2002 and actually it came in 2008, so I was six years early.

SESNO: Well, here we are in 2008, now importing something like 70 percent of our oil. We are 4 percent of the world's population, consuming 25 percent or so of its energy. You've spent how many million dollars on this plan of yours?

PICKENS: Fifty-eight million (dollars).

SESNO: A little pocket change.

(Cross talk.)

SESNO: What have you got to show for $58 million so far?

PICKENS: Well, when I committed to doing that -- and we kicked off on July 8th, that I had a lot more money then than I do now.

(Laughter.)

SESNO: Probably most people in the room did -- (laughs) -- maybe not quite so much. But, for $58 million bucks, what have you bought?

PICKENS: Okay, when I launched I wanted a grid, a 21st century grid for America. I wanted renewables -- wind and solar. And I wanted to get on the only resource we have in America that can replace foreign oil, which we have an abundance of, which is natural gas. And I wanted that to go into heavy duty 18-wheelers. I wanted all that, okay.

At this point we do have, I think, in the stimulus bill we're going to have a 21st century grid; we're going to have help for wind and solar; we're going to go to a renewable energy standard. And I think all this is going to happen in the stimulus bill.

I think that we will get the natural gas in the energy bill, which will be coming up very quick, very soon, and that will be -- I believe, that Senator Reid will come with a bill in the Senate, and I think Larsen (sp) and Boren will have a billion into House, which will put natural gas into the 18-wheelers.

SESNO: Now, over what period of time would that have to happen to make a meaningful difference?

PICKENS: Well, let me -- everything I tell you that I want to do I've got a model for, with the exception of wind and solar, and the grid. But, when I talk about using energy I have a model that I can tell you about. And this is the Southern California model, which was actually done for air quality problems that they were having.

And they had a manager there at the South Coast Air Quality Management District, the AQMD, which has money -- they've got taxing authority and they've got money. And he was trying to fix an air quality problem seven years ago, and he said, "Get me the biggest polluters in Southern California," which were the trash trucks. They run 24/7, and they idle a lot, and burn inefficiently.

And so one diesel trash truck taken off the road is equivalent to 325 cars. So, he said, "That's what we want, but how do we do it?" They said it's $135,000 to do a trash truck on natural gas, more than the diesel.

SESNO: 135,000 (dollars) per truck?

PICKENS: Per truck.

So, he said, "All right, let's go after it." And now -- that was seven years ago, he helped 50,000 (dollars). But he did set up a rule that if you're going to buy a new truck it has to be natural gas. You can keep your diesel trucks as long as you want to, but when you change -- when you get rid of the truck, you've got to buy natural gas.

So, he gave (a) 50,000 (dollars) incentive to each one of those trucks. The outcome of all that is now over 50 percent of the trucks in Southern California -- trash trucks are on natural gas. And no question, they did -- you know, it was a great amount of help for them.

Now, what I want to do -- that's my model -- move it over. And it's a seamless model. The fueling stations and everything else will come with the trucks, so you don't have to that -- in Washington. I'm in Washington, that's where I am and -- (laughter) -- I was in New York a few hours ago, but anyway.

Here they were asking me, said how are you -- how are you going to finance the infrastructure? I said the infrastructure will come with the trucks and the fuel. Don't worry about it. It'll happen.

And so I would want to give $80,000 to a 18-wheeler, 350,000 of them. What's it get for us? First thing is it isn't going to cost you $30 billion, but every gallon you use of natural gas will be one gallon less of foreign diesel. So you're getting a gallon-for-gallon trade-off. It creates 450,000 jobs, directly and 1,600,000 jobs indirectly and it reduces your imports by 4 percent.

Now, you can do that with 350,000 trucks, and there's 6.5 million 18-wheelers in America. Are all of those candidates? No. Some of those trucks are 10 or 15 years old. I'm going after the ones -- and my model here is Swift Trucking, they have 20,000 18-wheelers and they get 23 Kenworths every day, 365 days a year, which is 7,000. So, they're rolling that fleet out every three years.

SESNO: Where does that $30 billion come from? Where does the money for all this come from?

I was out a couple weeks ago at the National Renewable Energy Labs, and I was walking around and looking at the work they're doing with wind power, and trying to develop thin film photovoltaics. I visited a fellow who's put a solar array on his roof to power his house. It cost him $17,000. But, it didn't cost $17,000, it actually cost $40,000. The rest was brought down with various tax credits and other incentives.

PICKENS: But, he felt good about himself.

SESNO: He did. (Scattered laughter.) He felt very good about himself. But, his house -- because I visited his house, was the only one in the neighborhood because of the costs for that array on the rooftop.

How do we get, and over what -- and how long does it take us to get to the point where this is economical, because we can't afford to put everybody -- everybody's solar panels on the roof and at an affordable level?

I mean, your experiment with wind, your effort to push wind has been squeezed by the declining prices of natural gas and by the credit squeeze.

PICKENS: Exactly. But, go back to the trucks. Okay, this 350,000 is what I want to do. You're going to bring the cost of the trucks down pretty quick. The $135,000 difference in the trash trucks is now $28,000.

SESNO: It's $28,000 if they're new -- if you buy it new?

PICKENS: Yes.

SESNO: Mm hmm.

PICKENS: Okay. And so here I would not want to commit us to any further than 350,000 because I think the cost of the natural gas engine will be down to -- at the scale we will be at at that point, will be down at the same cost as diesel.

SESNO: Go back to wind for a minute -- because this was something that you had high hopes for and you had been planning on. What happened?

PICKENS: Well, other than -- it was sort of like one time I asked my father if we could do something, and he said there are three reasons we can't do it. And I said, what are they? And he said, the first one is we don't have the money, and it doesn't make a damn about the other two. (Laughter.)

SESNO: You don't have the money.

PICKENS: Yeah, what happened is there's no credit to do it. But, at the same time -- you pointed it out there, you hit it when -- that natural gas -- excuse me, wind is priced off the margin, and natural gas is the margin for power generation. And natural gas -- it'll all work if natural gas is $8 in MCF. Natural gas is $4 in MCF. Won't work.

So, there are other ways to get there. You can put into the rate base and you don't -- you don't always have to have $8 gas to make it work. But in Texas you do. We have to have $8 gas to make our --

But, you know, you say, well, you got a dead deal. No, not exactly. Mine is a 1,000-megawatt project, and I paid 150 million (dollars) to GE for the turbines, and I owe them another 1.5 billion (dollars). Not much, just a 1.5 billion (dollars) with a big change in your net worth. But, other than that -- (laughter.)

SESNO: So, what's -- (chuckles) -- so, what's happening?

PICKENS: At that point -- when I put up the 150 million (dollars) for the down-payment on 687 GE turbines, that -- and I don't start receiving them until 2011, so -- (scattered laughter) -- two years away before I start having to stack those up in my backyard. (Laughter.)

SESNO: It's going to be quite a backyard. (Laughs.)

PICKENS: Well, I'll do it at the ranch. I've got plenty of room there. But the -- I think that, you know, all of that's going to -- it's going to -- it's going to come back. I mean --

SESNO: So what will happen to your wind farm? Are you going to --

(Cross talk.)

PICKENS: The wind farm? Well, by 2011, when I receive them, I think you're going to have -- between now and 2011 there will be a recovery in the gas price, one; and two, you're going to probably come out of the energy bill or stimulus package there are going to be a wind farm -- excuse me, a wind bank, a wind bank that will do some financing in here.

He'll have an interest rate that, you know, will be set so you know what you're doing, and it'll give you plenty of time to pay it off. But, it will all be paid back.

SESNO: You met -- and you've talked energy with President Obama some time ago, as I understand.

PICKENS: That's September of '08.

SESNO: Did he "get" the energy issue then?

PICKENS: I think he got a lot more of it after he talked to me than he had when he got there. (Laughter.) But the --

SESNO: Do tell. (Laughs.)

PICKENS: -- but it was a very good meeting. It went for over an hour. He said, do you mind if I take notes? I said, I'd be kind of -- it made me feel good that he thought enough of what I was saying that he'd write it down.

But, we talked and in it I said -- he said, "Is there anything that I say in my remarks about energy that makes you uncomfortable?" And I said, well, one thing. I said, that you talk about having o1 million plug-in hybrids in 10 years. And, he -- you know, when somebody challenges you, you'll kind of straighten up. He did kind of straighten up in his chair and he said, "Mr. Pickens, let me tell you, I'm going to do that."

And I said, well, if you looked out on that parking lot here in Reno, Nevada -- and there were 1 million cars, I said, it'd look like a hell of a lot of cars, wouldn't it? And he said, "Sure would." I said, now step back. You're president of the United States, now look at the problem. He said, "What is it?" And I said, you have 250 million vehicles in America, and you're cranking out about 13 (million) or 14 million of them a year. And you're going to have 1 million in 10 years?

Then there was a pause, and he kind of laughed and he said, "Not very many, is it." (Laughter.) I said, no. I said, you got to do something about 250 million. But, I said, go to work on the big ones -- the ones that use the most fuel. Go to work on the 18-wheelers. Let the -- if we want to really reduce our dependency on foreign oil we've got to have resources in America that are going to replace the foreign oil.

And so I said, let the light duty go to the battery, and then I said, the heavy duty go to natural gas. And I said, we can work this thing down. I said, in five years we can have it down 30 percent. And in 10 years, I said, we can have it down -- I think we can have the Mid-East clear out of the picture, at that point, in 10 years.

He started making those speeches, and if you remember what he said on energy, he said in 10 years we are not going to be importing any oil from the Mid-East or Venezuela.

SESNO: Do you think that --

PICKENS: I think that came from that --

(Cross talk.)

SESNO: You think it's credible that this country, with those -- with this number of cars, with all the stops and starts, frankly, that we've made on our energy policy and energy consumption and alternatives over all the years -- can completely turn off the spigot on Middle Eastern oil in a decade?

PICKENS: Yeah, I do. I think you can --

SESNO: And there are -- and there are those, Boone, and you know this, who say that doesn't matter because, you know, if we turn it off, somebody else turns it on.

PICKENS: Well, who cares? Oh, you mean turns it on to us?

SESNO: No, no, no, that energy consumption is energy consumption; and unless this is happening globally that, you know, you're just as dependent -- but somebody else is dependent and it's still a geostrategic --

PICKENS: Well, that's their problem.

The minister of energy was in here -- had a meeting set up for a month at the Hay-Adams with me on Saturday, from Holland. And she came in and we talked, and when we came around to questions, well she said, "What are you doing?" (Laughter.) And I said, "me?" And she said, "Yes, you."

I said, I'm trying to get off of foreign oil. We want the oil from Canada and Mexico, but, I mean, that's okay, North American oil is fine. But, I said, I'm trying to get off of foreign oil from Africa, the Mid-East and Venezuela.

And she said, "You know that we imported 100 percent of our oil 10 years ago." She said, "We imported it from the Mid-East." She said, "We import zero now." And -- can they do it? They did it. Can we do it? Of course we can.

Let me tell you the way it would unfold. We have plenty of natural gas to do what I want to do. What will happen is natural gas will dribble down into the light duty -- your car, my car. I drive a Honda GX Civic, which is a natural gas car. And I have a --

SESNO: You drive a Honda Civic?

PICKENS: Mm-hmm.

SESNO: Okay.

PICKENS: Impressive, isn't it?

SESNO: It is. (Laughs.) New, or used, or -- (laughter). What -- you know, leather interior, I mean -- (laughter).

PICKENS: No, but it has a -- it's wrapped on the outside with the PickensPlan.com. (Laughter.) But, it's a commuter car, is what it is. Now, it has a weakness to it, and I'm not -- I'll give you that at the conclusion --

SESNO: Okay. (Laughs.)

PICKENS: -- telling you about the -- my commuter car, that it -- I have a device called a "fill", which goes -- it's hooked onto my gas line in my garage. And so at night I just plug it in and it fills. So the next morning it costs me $1 a gallon to do that and it's the natural gas in my home. Same with -- I cook my, you know, food with and heat the house.

So anyway, that vehicle is not to get in and go to Chicago in from Dallas. It's to be used there pretty close by. What's the range -- 200 miles. So if I have a 100-mile commute out and back, well, you know, I just fill it up again at night. I don't have -- that's the weakness to my story. I live less than a mile from the office. And I told the story in Austin the other day and some guy in the back of the room said, "Hell! Why don't you just walk?" (Laughter.)

SESNO: To which you replied?

PICKENS: Well, I thought, I don't think I'll tell the story again, but I did, because it did -- because it had a funny part to it. But I do exercise and I could walk, but I have to cross Loop 12 and I'd just as soon drive. (Laughter.)

SESNO: Because you have this remarkable perspective on this, I want to ask this: Since we're talking about transportation and transportation fuels, you know, when I was out at the energy labs I drove the hydrogen vehicle, which is lovely if you want a gallon-and-a-half of hydrogen in the car and pay $1 million for the vehicle right now. It'll be a few years before --

PICKENS: Mm-hmm. (In agreement.) I bet you feel good about yourself.

SESNO: I did feel really, really good. You're right. I felt even better when I drove the plug-in hybrid and the lithium-ion battery that they're working on there that will deliver 40 miles before it needs a recharge, according to where they are right now, but it adds an extra $10,000 at the current time to the cost to the vehicle.

PICKENS: But do you know who has the most advanced technology on the lithium battery -- the Chinese. So we could go from our dependency on oil from the Middle East to a dependency on a lithium battery to China.

SESNO: You see that as a good tradeoff?

PICKENS: Ha -- that's a horrible tradeoff!

SESNO: So in all the conversation about we can go plug-in hybrid; we can go ethanol; there's cellulosic ethanol; well, down the road there's hydrogen. What do you see the future as in terms of --

PICKENS: The way it's going to unfold is we're going to -- people in America now understand about energy. And my wife, in the middle of the night -- I told her, I said, Madeleine, I'm going -- somebody's got to do something about the American people not understanding energy. And I said, somehow at 80 years old I think it's fallen on me to do that. And I said, what do you think? And she said, baby, I think you can do it, but do it tomorrow, not tonight. (Laughter.)

And so I did. I put together the team and we committed the $58 million.

SESNO: You have a website. You have an army -- you talk to the army online. You have a new ad that you're running here in the Washington market and elsewhere.

What are you trying to get people to do and are they doing whatever it is that you want them to do?

PICKENS: Well, from our polling, everything came out pretty well like I had it figured. Is that the American people did not believe they were being told the truth from Washington. That was not the case. It's that the truth was not known in Washington. The politicians did not understand energy in America.

SESNO: People thought -- the public thinks that the politicians don't lie.

PICKENS: They thought they were lying.

SESNO: They thought they were lying?

PICKENS: Yeah. And they weren't lying. They didn't know is what it was, I know because I'm in touch with them. And if you had taken Senator Obama and McCain and say they were kind of normal senators on energy, and yet had given them a little test, both would have flunked. They just honestly didn't know and they didn't know the seriousness of what we were faced with -- the people in this country -- so I said, I'm going to go tell them.

And now what's happened, I've had 20 million people come in a website and have 1.5 million people signed up. But I'm pretty well convinced that I am now in touch with every place, because of the people that contact me and everything else. I think I'm in touch with 20 or 25 million people.

SESNO: Really?

PICKENS: I do. I really do. But see, that brings in the American Lung Association, because the fuel's clean. It brings in Sierra Club, because they like the green part to it. It brings in the wind people and you know, I've got all -- who else do I have?

MS. : (Off mike.)

PICKENS: I've got this room. (Laughter.)

But you're concerned. You're interested. You're sitting here listening to the story and what's going to come out of it is, I'm going to -- how it's going to work out is one, you're going to believe I know what I'm talking about. You're going to believe I'm a sincere America. I don't have anything to gain from this and it's costing me a lot of money to tell you the story.

And the way it's going to unfold is you're going to use your resources to get out of the trap that we're in. And the key resource is natural gas. How long is it good for -- 20 or 30 years. So now the final chapter I'll be gone for that, because the 20 or 30 years natural gas, you're going to then go to the battery or to hydrogen fuel cell, whatever. But the next generation of transportation fuel is yet to be determined, but it will be before we exhaust what natural gas we have to be able to use in these large volumes.

But you know, if you look at it, all of us in this room are going to live in the hydrocarbon era. The hydrocarbon era started with the automobile in about 1900. There's -- I think there's less than 3 trillion barrels of oil that's extractable at -- on a conventional basis from -- the reason I'm qualifying this is because of the oil shale on the western slope of the Rocky Mountains. That is oil that could be available to you at $300 or $400 a barrel.

SESNO: Three or four-hundred-dollars a barrel?

PICKENS: Yeah. So it's --

SESNO: And the other costs associated with it, because it would -- there are many who argue that environmentally and other ways it's a very costly -- very costly fuel to extract.

PICKENS: Exactly. It's not like the oil sand up in Fort McMurray in northern Alberta. It's vastly different than that. But I think you've got 2 trillion barrels at this point that you know you have. But 1 trillion has been used.

Now, of course the first 50 years of using oil in America was pretty slow and it accelerated pretty fast. And so when you went to 2000, you had used 1 trillion.

Now, the other trillion barrels that I think is available to you is going to be used very fast and by 2050 you will be into another transportation fuel and life will be vastly different than it is today in America.

SESNO: This is the Council on Foreign Relations, so let's talk for a few minutes about what you think this energy shift that you're trying to put see through and encourage, what impact that would have on global relations.

You point out, every time you talk about this issue, that one of the key elements is the types of regimes that produce the world's oil. Many of them are rogues, rascals or otherwise unfriendly places.

How do you see, then, this shift way, which moves in fits and starts, right? It's easy to do when gasoline is $4.65 a gallon, but suddenly it's down to 2 bucks again and we're buying --

PICKENS: But you're still importing the same --

SESNO: Still importing, but it becomes harder to move away from those imports and do some of these things when prices come down for any number of reasons.

PICKENS: Historically that's been the case, but because of what I've spent and the people I'm in touch with, that's not so. The American people now want an energy plan.

SESNO: If we're at the tipping point in the American people want and what they're going to get --

PICKENS: Am I reading it right is the question, you know?

SESNO: And it's the question we all ask. But in terms of global relations, in terms of the role that these energy producers -- whether it's Russia or Saudi Arabia or Venezuela -- play, what happens to them? How desperate do they get? What happens to oil prices as this shift takes place, because they're not going to take it lying down.

PICKENS: Well, I was at the Democrat convention -- and that's a true story that will surprise a lot of people, that I was at a Democrat convention. It was my first time ever, but I was selling my plan and I said it's totally nonpartisan and I'm out of the presidential race at that point.

And told Harry Reid -- we talked in his office and he said, I consider you to be an honorable person. I know you're trustworthy. If you tell me you're out, you're out and you're working on a nonpartisan issue. I want to help you. And since then, Harry Reid and I have become very good friends. And so I'm out of politics.

And at that convention -- my wife was born in Kirkuk, Iraq and her mother's Lebanese, her father was English and she has friends in the Mid East. And so at that convention, they knew we were there and she got a call and we were getting ready to leave. It was the afternoon -- I didn't want to stay for all of it and so we were going to leave in the afternoon about 2:00. And she said they want us to go to dinner with them -- friends from the Mid East. And so I said, well, let's go and leave after dinner. And so we do.

And they had a really nice dining room -- yeah, a dining room -- private and everything so we can talk -- God, that place was loud! Every place I went had too many people there. Denver is not a good place to have a convention like that. It's way too small. And so we were -- you know, it was crowded getting in there. I though, God, how am I going to get in here? And I don't hear that well and I knew the people we were going to talk to had accents and I thought, Hell, I never will hear! (Laughter.) Well, serious! You know you struggle all through the evening, you know, and you hate to keep asking people to repeat. But they had a really nice dining room -- you can see this, can't you? You're not old enough. You don't have hearing aids, but Frank, listen to you, because I know what I'm talking about, because you will be here some day.

And so anyway, here we are in this nice quiet room and all glassed in. You can see all this crazy activity going on outside the room, but we got pretty concentrated on this conversation. And what it came down to is that -- what really are you doing? Was the question to me. I said, what am I doing? They said, on your Pickens Plan, what?

I said, I'm trying to get off of oil that comes from areas around the world that are really not friendly to us. And this was one of the countries that considered themselves in this meeting that they were friendly. And so they wanted to know. And they were very interested in talking to me and all. They said, what we would like you to do is to come to our country and build a big wind farm.

Me go to the Mid East and build a wind farm. You think about that!

SESNO: Who was saying this to you?

PICKENS: I'm not going to reveal who it was. I'm telling you it was a major producer of oil from the Mid East. And the ambassador was sitting there.

SESNO: Okay.

PICKENS: So we talked further. And I thought I go to the Mid East so the Pickens doesn't go forward here and I will be over there doing a huge wind farm and they're going to help me do it.

It was a lot like green mail. You remember those days? But I didn't hear enough of it, to say that I could give a sworn statement it was green mail, but they were interested in doing business with me, but they wanted me to do business ins the Mid East, which I told them I had no interest in that.

And so when we got to the car, one of their people walked out and said to Madelyn, said, we have money running out our ears. And that was pretty clear. I mean, I know what that looks like. And so -- (laughter) -- but the point is, they were concerned about what I wanted to do. The question was, could I get it done? And they wanted to see if I was real, if I knew what I was talking about and whether I financed to the point that I could spend the money to tell the story and have somebody accept the story.

And I don't know -- we never had another meeting after that, so I don't know really how they sized it up, but I was not interested in what they were talking about that they wanted met to do.

The point is, what are they going to do if -- the only way, Frank, that you have any chance of getting control of your energy destiny is you are going to have to get on your own resource. Otherwise, you are completely captured at this point.

If you go back and look at 40 years back, we've never had an energy plan in America -- never. Why? Well, you could say you didn't have any leadership, but you had cheap oil. And so the leadership we had never was strong enough to say we can't continue to import oil at greater and greater levels.

In 1991, the Gulf War, it went over 50 percent. And so I started making speeches in the early '90s and the price of oil was cheap. And so people said, you know, what you say really makes a lot of sense. But when it went to 4.11 -- the day I announced here in Washington, that was the day that people said -- they'd been watching it climb -- now you're up to $147 a barrel and they're saying, could this be real?

SESNO: We were writing about $200-a-barrel oil at that point.

PICKENS: Oh, sure you were, because you know, you're trying to get ahead of what's going to happen and be smart. And so 200, 300 (dollars) whatever. You're going to see $200 or $300 a barrel. I promise you that you are. That is where you're heading. I mean, they have prepared you. If you just listen to them, every time they talk, listen to what they say, because they are not trying to scare you. They are telling you what they're going to do.

And when you saw Ali Al-Naimi, the oil minister from Saudi Arabia on "60 Minutes" the other day, he said: We have to have $75 a barrel. What he's talking about is the OPEC countries have to have it, because some are not as financially well off as others. But they're going to get $75 and all they have to do is cut down the supply. There's 85 million barrels in the world and that's about it. That's kind of blood, guts and feathers of the oil production in the world -- 85 million barrels.

And somebody said, well, you can do this and that and you could get up to 95 million barrels. You can say that, but when you get down to it, see, 85 million is now declining at the rate of 8 percent a year. So every year you have to put back seven to get to 85. And I don't know where this oil's going to come from that people keep adding in that's going to happen.

I mean, there are projections that the world's going to need 130 million barrels of oil by 2015. It doesn't make any difference. That can't happen, because the oil is not available.

SESNO: We come to the point now, Boone, in the conversation where I'd like to invite council members to join the conversation and discussion.

So if you'd wait for the microphone and speak directly into it; please stand, state your name and your affiliation. And we'd like to ask you to keep your comments and your questions as concise as possible to allow us to move around this very crowded room.

PICKENS: Okay, while they're moving to that, let me add one thing.

You haven't had an energy plan for 40 years. Say we don't have one and we go 10 years forward, this is where you'll be: You're going to be importing 75 percent and you're going to be paying $200 to $300 a barrel for it. That's exactly where you're headed.

SESNO: So Pickens prediction to go to the questions.

Let's start with this lady right here.

QUESTIONER: Hi.

SESNO: Please stand and tell us your name and affiliation.

QUESTIONER: My name is Maddie Babb (sp) and I'm with Jennings -- (inaudible).

I share, and I imagine everybody in this room shares your interest in energy security. But we've listened now to this Pickens plan -- I'm one of the 25 million people who goes onto your website -- and I'm curious why the issue of climate change never passes your lips, because the -- or it hasn't this evening.

And the army of people you hope to support your plan, I think, would be very compelling to people who get up in the morning worried about climate change perhaps even more than they worry about energy security.

PICKENS: Okay. Climate change is not something that's going to -- what it -- the consequences of climate change you're not going to see Monday morning. It's going to be a creeping change.

And I'm one of the few geologists in this country that believes climate change is real, because they can clearly show you that they've had millions and millions of years of drought, millions and millions years of ice -- you know what I mean. And you're just in one of those periods and you haven't -- you know, just a few years have passed and all. But I don't agree with that.

But my point is -- and I had -- oh, God, it was -- well, it was earlier this month. It was two weeks ago in Houston. And here I am with these geologists that are my age or older and they are, you know, you have lost your mind, Boone, you know, that you believe in climate change. Don't even embarrass yourself by saying that.

And I said, okay, if we take whatever precautions at this point and we do accept climate change, I said everything that you do -- whether you've wasted your time or your money -- has not hurt you, but it could help you. And I said, I'm not going to wait until the bus runs over me. I'm going to get out of the way is the way this is going to work. And this is -- we need to go, you know, to start to move as if we are having climate change and we're going to suffer the consequences.

But let me go back -- you're asking me why don't you put the two together? That's exactly what Al Gore asked me. Al Gore and I have become pen pals. And I sat next to him here yesterday. I sat next to Al Gore and next to Secretary Chu -- two Nobel winners -- and I asked for them to be sure they got a picture of me and I wanted to send that to the faculty at Oklahoma State University to show them who I hung out with.

SESNO: Are you still tangling for that tenured position? (Laughs.)

PICKENS: Yeah, I'm going for the tenure. But what -- and what I told Al the first time we talked about this, I said, Al, look, I believe in climate change but I said, for me, I'm after two things, and that's page one for me. One is the security for America to get off foreign oil from the enemy, okay; and two is our economy. Everything we can recapture, the 400 billion (dollars) that we spent last year on oil, that whatever we get back means jobs for us, profits, taxes and the economy moves forward. But when we have 400 billion (dollars) go out of the country, and that was at $147 a barrel, you are going to spend $700 billion on foreign oil.

Now, we didn't have -- our whole year didn't look like that, so I think it was 4 (hundred billion dollars) or 500 billion (dollars) that went out. But what you're going to have happen, they're going to move the price up on you. And let me give you this comparison. Five years ago, OPEC was -- their revenues from all around the world for the sale of their oil was 250 billion (dollars); last year it was 1.250 trillion (dollars). The price will move up. You will be looking at 2 (hundred dollars) to $300 a barrel in 10 years, and you'll be importing 75 percent of your oil.

SESNO: Let's go to the next question. Let's go to this gentleman here, and then we'll come over to the front row.

QUESTIONER: (Inaudible) -- capital partners. And tonight we've talked primarily about the supply side. I'm interested in the demand side, and not just from the transportation sector and CAFE standards but buildings and appliances and what sort of role that can play, especially from an investor such as yourself when it seems to me that there's some real private sector gains there made by investment in those sort of technologies or existing products.

PICKENS: You're talking about conservation?

QUESTIONER: Energy efficiency, primarily.

PICKENS: Okay. We've got to have it. I mean, all that's got to be understand, and you've got to have a leader, and I hope Obama is that leader, that he can stand up in front of the American people and say, this is what we're up against and this is the solution, and I'm going to report back to you monthly. And the way it goes is every month we're going to look at how much oil we are importing and see what's the curve turndown and enjoy the results together.

It has nothing to do with politics. It's Americans working together on a problem very similar to war. And efficiency will be a big part of that. There's no question we can be more efficient, but that direction will come from the president. Maybe he doesn't set out the 10 things we're going to do, he tells you that Frank's going to give you the 10 things, and he's going to help you. (Scattered laughter.)

But you know what I mean. He'll give you an expert. And we will become very, very interested in what's going on and how we can help ourselves. But efficiency is a big part of what I'm talking about.

SESNO: Let's come to the front here, please.

QUESTIONER: Hi. I'm Steve Charnovitz from George Washington University Law School. Thank you for coming and for your leadership. I want to probe the role of energy independence, or what you called energy destiny or energy security, with respect to energy policy. And everyone would agree, I think, we need an energy policy for supply and price and solution and climate issues. You're saying also energy independence.

And tonight you said, well, Canada and Mexico are okay, they're North America, but you don't want to import energy from our enemies. So here's my question. If Nixon had succeeded back in the early '70s with the energy independence that he promised and America had control all these decades of its energy destiny, how would history have been different?

PICKENS: Well, history would've been different this way is that -- we would -- I think a great part of our lost credibility globally is that around the world they view us as a little bit stupid that we would sit here with resources at home and rely on the enemy's resources. And they wonder when it's going to happen to us like Russia did to Europe this winter when they cut off the gas and negotiated on their knees with the Russians to turn the gas back on -- we're cold, and we'll pay for it. That we're going to find ourselves in the same spot.

And the recession, in a lot of ways, actually helped us gain time because the OPEC nations have spent a tremendous amount of money and they have found themselves in a financial predicament, too. And that's one reason why they have to raise the price on us as quickly as they do. But they're going to go back to -- we'll be $75 by the end of the year.

And so -- but what would've changed in history had we gotten control and held onto it? Our energy -- at the point of 1970, we actually didn't have enough natural -- we didn't know we had enough natural gas to save ourselves at that point. That's occurred in the last 10 years. So that's just a small point.

But let's just say you were able to. I think that our credibility would be vastly different today because I think we're seen as really, you know, a big gorilla with a soft, soft spot that could be triggered anytime that they decide to do it to us.

You know, Georgetown is where we launched our first -- did you go to our town hall meeting there?

QUESTIONER: No, sir. I didn't.

PICKENS: We had our first town hall meeting at Georgetown. And we get tremendous support from young people because I pass off to them. I say, hey, look, this really is your responsibility more than it is mine. I can get -- at 80-years old, I can get to the finish line, but you can't. And the future generations, my children and grandchildren and all -- they're so tired to hearing this speech at the dinner table. They say ee're onboard, Papa, we're onboard.

SESNO: (Laughs.) Okay. Let's go to this gentleman here on the aisle, then we'll come back over to the other side.

QUESTIONER: Alan Wendt (ph). Mr. Pickens, you said there are at least 1 trillion barrels of oil still available in the world. And you also postulated a significant increase in the price, 175 (dollars), $200 a barrel. Is that not simply going to trigger that much more supply, which will eventually then drive down the price of oil, as we've seen recently? In other words, how do you get out of this vicious circle given the real efficiency and usefulness of oil for the internal combustion engine and the great dependence of this country on automobile transportation?

PICKENS: Well, go back and look at the last time there was a billion-barrel oil field found in the world, and you would tell me Tupi in offshore Brazil, which they now rank as 8 billion. Now tell me when the one before Tupi was found, and you will see when you step down, when billion-barrel oil fields were found, they've mostly all been found, I think. And so I know your question is, all you have to do is throw more money at it and we'll find more oil. I say the big oil fields have been found and that is not the way it'll unfold.

So I think you've peaked at 85 million barrels. You can't get anymore out of the world than that. And so then you start to look at demand. And when you saw the demand in the fourth quarter of 2008 predicted to be 87 million barrels a day, well, 85 (million) won't cover 87 (million). Now, there's inventoried oil around different places and -- so the system can handle -- 85 (million) can handle 87 (million) for a while.

But then you went into just at the time that you were getting ready to find out how long you could handle 87 (million), the world went into a recession, and now the demand's dropped down to probably 83.5 (million). And so here you are, you still have 85 (million), and you've got too much oil around so the price falls $100 a barrel. Very convenient.

What did that do for the world? Well, it was about the biggest stimulus you could've possibly given the world. It was $3.2 trillion that was just plugged in at just the difference in 147 (dollars) and $37 for the oil. So I don't believe -- in answer to your question, I don't think the oil is there. I don't think you can get it.

And you see a company like Exxon that has, you know, 30 (billion dollars) to $40 billion in cash sitting there, buying their own stock back at 20 (billion dollars) or $30 billion a year, what's that all about? They don't have anyplace to drill is what it is. They cannot get places to drill. Around the world, they can't -- you used to. You know, you could get concessions. It's extremely difficult now. Any country that is financial able, they're going to probably have a state-owned oil company. And 70 percent of all the oil today is in the hands of state-owned oil companies.

And Exxon, for instance, have reserved in the world -- and probably 75 percent of the reserves is foreign -- they have 2.5 percent of the reserves in the world. And you know, you have these Senate hearings, and you guys sitting up there. And I think their pride is so big they will not say, hey, look, don't call me up here, call some of these people up here that have a lot of oil. We only have 2.5 percent of all the oil in the world. I think they'd rather go in and get their ass kicked around than they would to say, we don't have much oil.

SESNO: Let's see, let's go --

QUESTIONER: Yes, sir, Mr. Pickens. First of all, I want to thank you for what you do and what you represent. Gary Miller, American patriot. My question is, do you see that oil will be the spark, no pun intended, for world instability, and those who create their own energy policy and are energy dependent (sic) will be able to withdraw themselves from that? This is more than a luxury, it's a necessity. And would you see that this is tied to national security?

PICKENS: Well, there's no question. Number one for me is national security. And we have to get -- something has to change. We cannot continue like we are now. What you're getting ready to come up on -- we get about 2 million barrels a day from Canada and 1.4 million from Mexico. And Mexico is in a decline like this, and Mexico is out of oil. They will be a net importer in five years. So that 1,400,000 barrels has got to come from someplace else if we continue on the same track. There's only one place it can come from is from OPEC.

And two, Venezuela has made a deal with the Chinese. And when the Chinese can process the low-grade, high-sulfur crude out of Venezuela, when they can process that in their refineries, that 1 million barrels a day is going to go to China. So there's 2.4 million barrels that we have to replace. We're importing 12 million barrels a day. So you're going to be, at that point, you're going to have 20 percent of your oil will have gone away, and you're going to have to get it someplace else.

So what happens is it truly is like a treadmill. I mean, they just turn it up from 4.0 to 6.0 to 7.0, you're running faster and faster all the time. And you know, you're going to run out of gas pretty quick is the way it's going to go. You can't continue to run at the pace we're going to have to run.

QUESTIONER: May I just follow up on that? You mentioned China, and it's something that's worth pausing and just clarifying for a moment and getting your thoughts on this because one of the things that China is doing, as we know, is trying to enter into long-term contracts with producers from Venezuela to Nigeria and beyond. What impact is that going to have on this sort of global scenario and energy scenario that you've laid out given China's growth? Even with the slowdown, China's growth and the numbers there --

PICKENS: Well, China has money. And I wonder when they stop buying our debt and start buying resources with that. And two deals have been announced and a policy has been announced in the last two weeks. One was $25 billion that China owed the Russians for 300,000 barrels a day for 20 years. Now, that's supposed to be paid back, but if it's not paid back, they bought the oil for $11.40 a barrel. And so I don't know. I mean, when you can't pay something back -- but I would suppose, at some point, that may be renegotiated because that's a pretty cushy deal.

And also, the Chinese announced that they were going to put more money into the national oil companies CNOOC and Sinopec, that they're going to put more money in them to buy resources around the world. And I'm trying to think of the third thing that they did. They loaned money to Petrobras in Brazil for a (call on ?) on oil. And so they're gathering it up as fast as they can go.

The United States does not have a state-owned oil company. So what happens is that you've got to get, you know, the politicians to understand fully who we're competing with and how the competition is growing. Right now, we're losing every ante. I mean, we never win. And so we continue to get further and further behind all the time.

SESNO: Let's go to a last question, and we'll go to this lady right here, front row. Hang on one second, there's a mike.

QUESTIONER: I'm Misty Worthline (ph), and I run something called the Energy Conversation. We just finished three years, funded by Defense. It's a month meeting to educate the Washington community about energy. I started out with the same objective you did. I'm struck by how complex this is. And in trying to tell the story, I think it is a story that needs to be told, visualization helps a lot.

PICKENS: What does?

QUESTIONER: Visualization, making a film. There was a wonderful four-minute film that was shown at Davos about the world water crisis. There were no words and just money and pictures. Have you considered getting someone to write a script that you could use to sort of give to the country so they could -- it's so complicated. I think if they don't get it visually it's just very hard to understand.

PICKENS: Well, from your position, you're telling me that it is complicated. From my position, it's pretty straightforward because I've been in the business for over 50 years. And so, you know, what I come down to is we must replace foreign oil with resources in America. Okay, that's where I come from.

Then I say, okay, list the resources. And I usually have a white board, and I go over there and I put up, you know, we've got some oil, 5 million barrels a day, we're using 21 million. And then I come down to the next one is natural gas, coal, hydro, wind, solar, nuclear, geothermal, biofuels. And then I come down with a list of about 11 or 12. That's it. We don't have anymore than that.

So I say, okay, now, I'm going to replace foreign oil. What do I have to replace with? I've got my own oil. So I say, okay, let's drill the OCS, East Coast, West Coast and eastern Gulf of Mexico and throw in ANWR. Those are the four areas that are connected to us where we could get some oil. How much oil could we get? I would feel we were very, very fortunate, out of all that, that we could get 2 million barrels a day -- (inaudible). I was quoted on that a month ago, and I got a call from -- (inaudible) -- and George Attell (ph) in Houston who are consulting engineers. And they said, you want our quote? And I said, yeah. I said, all right, we're going to get 2 million barrels out of it. I said, I would be pleasantly surprised if I got 2 million barrels. They said, well, we will be pleasantly surprised if we got 30,000 barrels. Now, that's scary, that's scary. But I would say you're probably closer to 30,000 than you are 2 million.

But let me tell you another point here. People have the idea that ANWR on the Arctic Coastal Plain is the answer to America's energy problems. The Arctic Coastal Plain has one pipeline, and it carries 2 million barrels of oil from Deadhorse to Valdez. That's all. There's not going to be another oil pipeline out of Alaska. That's it. So 2 million barrels is all you can get from Alaska down to Valdez. Now, maybe you can get 2 million barrels for 100 years, that would be fine, but you're not going to solve the problem off the Arctic Coastal Plain. It isn't there.

And I met with Sarah Palin when she announced running for vice president. And she said she would like to have a meeting with me about energy. And she came to Dallas, and we met. I think she had a fundraiser and happened to be in Dallas. But she was in Dallas, and she asked for a meeting. Anyway, she came by, it was an hour and a half meeting. Sarah Palin knows more about energy than either Senator Obama, now president, and Senator McCain. Why? Because she's in a state where it's all oil, it's all they talk about. And she was in the regulatory department and then governor. But she only knows Alaska. And she said, you are way too conservative on the reserves we have in Alaska. I think that if you got 4 billion barrels out of ANWR you'd be damn lucky. That's reserves. She said, I think there's 20 billion. And I said, you're the governor, I'm the geologist. (Laughter.)

SESNO: Draw your own conclusion. (Laughs.)

PICKENS: And I said, you say you're going to get 2 (hundred trillion) or 300 trillion cubic feet of gas. Where from? And she said, in the Beaufort Sea. I said, how much do you have so far? She said, not anything yet, but I think it's there. I said, you're the governor.

And so Alaska does not have near the oil and gas that we hope that it would have. But I hear what you're saying. Would I get somebody to do something for me? I think I can do it for myself. I mean, I don't need anybody to do it. Maybe I need them to do a film and everything else, if that's what you're saying.

QUESTIONER: (Off mike.)

PICKENS: Yeah. But I think it's --

QUESTIONER: (Off mike) -- great story, but not everybody gets it by just hearing the words. Visualization can help -- (inaudible).

PICKENS: It can help, you're exactly right. But remember this, we have to get on our own resources. That makes sense, doesn't it?

SESNO: That's the story.

PICKENS: It is. We've got to get on our --

SESNO: I would like to mention one thing, if I may, before we part, and it's a personal note, if I may, and it's one of the reasons that I'm so thrilled to be here having this conversation. I think you're right about telling the story. I think you're right about visualizing.

I also think you're right about invoking the army and having this go out to people. I'm working over at George Washington University on a project that we're calling "Planet Forward." If you go to planetforward.org you'll see a little something now. But what this is going to be is this is going to be stories from across the country, from experts and citizens alike, as to what they think and what they're living and what they're doing to bring about and to imagine the future of energy. It all is going to start online. We're going to have people rate it. It's going to be before a panel. Maybe even Boone Pickens is going to join us.

PICKENS: I will if you ask me to.

SESNO: I just asked you to.

PICKENS: Okay, I'll be glad to, sure.

SESNO: And then it's going to be a nationally broadcast special on public television. We're reaching out through the stations to many of the local stations to involve local communities to try to make this something that can go from the bottom up and then back down again because we have been for these 40 years without an energy policy.

PICKENS: Exactly.

SESNO: We are out of time now. And what you're doing is a tremendous national service, and it's pushing the debate. And it's been an amazing pleasure to be here. Our website, planetforward.org, actually goes live on the 6th of March. And if you or people you know have ideas about what we should be doing on conservation and other things, we'll take those videos. And those videos and other things will be there for other people to see and experience. We've got some experts, too. So I'm very excited about this. And I'm hoping that maybe together we can get --

PICKENS: I'll help in any way I can.

SESNO: All right. It's been a great pleasure to have Boone Pickens and all of you. Thank you, all, very, very much. (Applause.)

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THIS IS A RUSH TRANSCRIPT

FRANK SESNO: Good evening, everybody. Welcome to the Council on Foreign Relations. I'm Frank Sesno, your tour guide and very honored moderator this evening. And it's always a good idea to agree to preside an event -- at an event at the Council on Foreign Relations when you know the person that you're appearing with will pack the house.

Welcome to T. Boone Pickens, and welcome to today's Council on Foreign Relations meeting. May I ask, by way of starting, for everybody in the room to please turn off -- not merely mute or vibrate, your cell phones, BlackBerries, various wireless devices, to avoid creating interference with the wireless sound system. So, it's a little bit like flying on a plane, we want it to land safely so we obediently turn our devices off, and we'd ask you to do the same.

I'd also like to welcome some 150 Council members who are joining this discussion this evening via teleconference, so we thank you for being with as well. And as a reminder to everyone, and especially T. Boone Pickens here, this event is on the record, so we will be doing that for all times.

So, welcome to Washington.

T. BOONE PICKENS: Thank you.

SESNO: You have had a visit --

PICKENS: I feel like I'm living here. (Laughter.)

SESNO: (Laughs.) Well, I turn on the radio and I hear you. I turn on Larry King and I see you. I turn on the Energy summit and there you are. What are you trying to accomplish here on this visit, and -- (laughter) -- more broadly? You've been here before.

PICKENS: You know, I launched the Pickens plan on July 8, 2008. And the reason I did it is my wife, in the middle of the night -- it was about probably the middle of June, maybe the first of June, but anyway I kept harping about that nobody -- you know, now we're in the campaign and all, and I said neither candidate is talking about energy. And I said, this is the most important item that we can talk about, would be energy. And I said I really think it needs to be elevated into campaign dialogue.

And so she would, from time to time, say I think you're right, you know. Why not, I mean, she kind of agreed with me -- (laughter) -- and so -- on that point. So, finally I got so frustrated because I had followed presidential campaigns for years, and if you go back to '70, Richard Nixon said at the end of that decade of the '70s, "We won't be importing anymore foreign oil." And at that point we were importing 24 percent. At the end of the decade we were importing 28 percent. So, wrong.

And then from Nixon forward, everybody -- Democrat or Republican would say, like me, and we'll be energy independent, as if it was just going to happen like that. And never did I ever see anybody question a president about, "You said, back two years ago, that we would be energy independent, and, in fact, we're even more dependent after two years of you being president than we were when you said we'd be energy independent." "How are you coming along on your" -- "when are we going to get energy independence?" Nobody said it.

And, you know, once you get rabbit ears on something like that, you know, you say, is anybody going to ever ask one of these people "When will we be energy independent?" So, as it unfolded I became more and more frustrated, and gave my wife a cauliflower era listening to me -- (laughter) -- on what should happen, and you know, "why don't they;" and everything else.

And then I had the experience of the Dole campaign in '96. And he said, "Will you be the Texas chairman for me?" And I said I will if I can be adviser on energy. "Of course. You know more about energy," and bla-bla.

So, what it means, you know, to be chairman is raise money. And so I raised the money and helped in every way I could, and nothing was ever mentioned on energy. So, finally, we were together and had some time and I said, let's talk a little bit about energy, what do you say? And he said, "Sure. Go ahead." And so I went through my spiel on energy.

But, I did -- I was early, and that was in the '96 campaign, and I told him, I said, if you win twice here, you will be neck-deep in energy problems, because I thought it was coming in 2002 and actually it came in 2008, so I was six years early.

SESNO: Well, here we are in 2008, now importing something like 70 percent of our oil. We are 4 percent of the world's population, consuming 25 percent or so of its energy. You've spent how many million dollars on this plan of yours?

PICKENS: Fifty-eight million (dollars).

SESNO: A little pocket change.

(Cross talk.)

SESNO: What have you got to show for $58 million so far?

PICKENS: Well, when I committed to doing that -- and we kicked off on July 8th, that I had a lot more money then than I do now.

(Laughter.)

SESNO: Probably most people in the room did -- (laughs) -- maybe not quite so much. But, for $58 million bucks, what have you bought?

PICKENS: Okay, when I launched I wanted a grid, a 21st century grid for America. I wanted renewables -- wind and solar. And I wanted to get on the only resource we have in America that can replace foreign oil, which we have an abundance of, which is natural gas. And I wanted that to go into heavy duty 18-wheelers. I wanted all that, okay.

At this point we do have, I think, in the stimulus bill we're going to have a 21st century grid; we're going to have help for wind and solar; we're going to go to a renewable energy standard. And I think all this is going to happen in the stimulus bill.

I think that we will get the natural gas in the energy bill, which will be coming up very quick, very soon, and that will be -- I believe, that Senator Reid will come with a bill in the Senate, and I think Larsen (sp) and Boren will have a billion into House, which will put natural gas into the 18-wheelers.

SESNO: Now, over what period of time would that have to happen to make a meaningful difference?

PICKENS: Well, let me -- everything I tell you that I want to do I've got a model for, with the exception of wind and solar, and the grid. But, when I talk about using energy I have a model that I can tell you about. And this is the Southern California model, which was actually done for air quality problems that they were having.

And they had a manager there at the South Coast Air Quality Management District, the AQMD, which has money -- they've got taxing authority and they've got money. And he was trying to fix an air quality problem seven years ago, and he said, "Get me the biggest polluters in Southern California," which were the trash trucks. They run 24/7, and they idle a lot, and burn inefficiently.

And so one diesel trash truck taken off the road is equivalent to 325 cars. So, he said, "That's what we want, but how do we do it?" They said it's $135,000 to do a trash truck on natural gas, more than the diesel.

SESNO: 135,000 (dollars) per truck?

PICKENS: Per truck.

So, he said, "All right, let's go after it." And now -- that was seven years ago, he helped 50,000 (dollars). But he did set up a rule that if you're going to buy a new truck it has to be natural gas. You can keep your diesel trucks as long as you want to, but when you change -- when you get rid of the truck, you've got to buy natural gas.

So, he gave (a) 50,000 (dollars) incentive to each one of those trucks. The outcome of all that is now over 50 percent of the trucks in Southern California -- trash trucks are on natural gas. And no question, they did -- you know, it was a great amount of help for them.

Now, what I want to do -- that's my model -- move it over. And it's a seamless model. The fueling stations and everything else will come with the trucks, so you don't have to that -- in Washington. I'm in Washington, that's where I am and -- (laughter) -- I was in New York a few hours ago, but anyway.

Here they were asking me, said how are you -- how are you going to finance the infrastructure? I said the infrastructure will come with the trucks and the fuel. Don't worry about it. It'll happen.

And so I would want to give $80,000 to a 18-wheeler, 350,000 of them. What's it get for us? First thing is it isn't going to cost you $30 billion, but every gallon you use of natural gas will be one gallon less of foreign diesel. So you're getting a gallon-for-gallon trade-off. It creates 450,000 jobs, directly and 1,600,000 jobs indirectly and it reduces your imports by 4 percent.

Now, you can do that with 350,000 trucks, and there's 6.5 million 18-wheelers in America. Are all of those candidates? No. Some of those trucks are 10 or 15 years old. I'm going after the ones -- and my model here is Swift Trucking, they have 20,000 18-wheelers and they get 23 Kenworths every day, 365 days a year, which is 7,000. So, they're rolling that fleet out every three years.

SESNO: Where does that $30 billion come from? Where does the money for all this come from?

I was out a couple weeks ago at the National Renewable Energy Labs, and I was walking around and looking at the work they're doing with wind power, and trying to develop thin film photovoltaics. I visited a fellow who's put a solar array on his roof to power his house. It cost him $17,000. But, it didn't cost $17,000, it actually cost $40,000. The rest was brought down with various tax credits and other incentives.

PICKENS: But, he felt good about himself.

SESNO: He did. (Scattered laughter.) He felt very good about himself. But, his house -- because I visited his house, was the only one in the neighborhood because of the costs for that array on the rooftop.

How do we get, and over what -- and how long does it take us to get to the point where this is economical, because we can't afford to put everybody -- everybody's solar panels on the roof and at an affordable level?

I mean, your experiment with wind, your effort to push wind has been squeezed by the declining prices of natural gas and by the credit squeeze.

PICKENS: Exactly. But, go back to the trucks. Okay, this 350,000 is what I want to do. You're going to bring the cost of the trucks down pretty quick. The $135,000 difference in the trash trucks is now $28,000.

SESNO: It's $28,000 if they're new -- if you buy it new?

PICKENS: Yes.

SESNO: Mm hmm.

PICKENS: Okay. And so here I would not want to commit us to any further than 350,000 because I think the cost of the natural gas engine will be down to -- at the scale we will be at at that point, will be down at the same cost as diesel.

SESNO: Go back to wind for a minute -- because this was something that you had high hopes for and you had been planning on. What happened?

PICKENS: Well, other than -- it was sort of like one time I asked my father if we could do something, and he said there are three reasons we can't do it. And I said, what are they? And he said, the first one is we don't have the money, and it doesn't make a damn about the other two. (Laughter.)

SESNO: You don't have the money.

PICKENS: Yeah, what happened is there's no credit to do it. But, at the same time -- you pointed it out there, you hit it when -- that natural gas -- excuse me, wind is priced off the margin, and natural gas is the margin for power generation. And natural gas -- it'll all work if natural gas is $8 in MCF. Natural gas is $4 in MCF. Won't work.

So, there are other ways to get there. You can put into the rate base and you don't -- you don't always have to have $8 gas to make it work. But in Texas you do. We have to have $8 gas to make our --

But, you know, you say, well, you got a dead deal. No, not exactly. Mine is a 1,000-megawatt project, and I paid 150 million (dollars) to GE for the turbines, and I owe them another 1.5 billion (dollars). Not much, just a 1.5 billion (dollars) with a big change in your net worth. But, other than that -- (laughter.)

SESNO: So, what's -- (chuckles) -- so, what's happening?

PICKENS: At that point -- when I put up the 150 million (dollars) for the down-payment on 687 GE turbines, that -- and I don't start receiving them until 2011, so -- (scattered laughter) -- two years away before I start having to stack those up in my backyard. (Laughter.)

SESNO: It's going to be quite a backyard. (Laughs.)

PICKENS: Well, I'll do it at the ranch. I've got plenty of room there. But the -- I think that, you know, all of that's going to -- it's going to -- it's going to come back. I mean --

SESNO: So what will happen to your wind farm? Are you going to --

(Cross talk.)

PICKENS: The wind farm? Well, by 2011, when I receive them, I think you're going to have -- between now and 2011 there will be a recovery in the gas price, one; and two, you're going to probably come out of the energy bill or stimulus package there are going to be a wind farm -- excuse me, a wind bank, a wind bank that will do some financing in here.

He'll have an interest rate that, you know, will be set so you know what you're doing, and it'll give you plenty of time to pay it off. But, it will all be paid back.

SESNO: You met -- and you've talked energy with President Obama some time ago, as I understand.

PICKENS: That's September of '08.

SESNO: Did he "get" the energy issue then?

PICKENS: I think he got a lot more of it after he talked to me than he had when he got there. (Laughter.) But the --

SESNO: Do tell. (Laughs.)

PICKENS: -- but it was a very good meeting. It went for over an hour. He said, do you mind if I take notes? I said, I'd be kind of -- it made me feel good that he thought enough of what I was saying that he'd write it down.

But, we talked and in it I said -- he said, "Is there anything that I say in my remarks about energy that makes you uncomfortable?" And I said, well, one thing. I said, that you talk about having o1 million plug-in hybrids in 10 years. And, he -- you know, when somebody challenges you, you'll kind of straighten up. He did kind of straighten up in his chair and he said, "Mr. Pickens, let me tell you, I'm going to do that."

And I said, well, if you looked out on that parking lot here in Reno, Nevada -- and there were 1 million cars, I said, it'd look like a hell of a lot of cars, wouldn't it? And he said, "Sure would." I said, now step back. You're president of the United States, now look at the problem. He said, "What is it?" And I said, you have 250 million vehicles in America, and you're cranking out about 13 (million) or 14 million of them a year. And you're going to have 1 million in 10 years?

Then there was a pause, and he kind of laughed and he said, "Not very many, is it." (Laughter.) I said, no. I said, you got to do something about 250 million. But, I said, go to work on the big ones -- the ones that use the most fuel. Go to work on the 18-wheelers. Let the -- if we want to really reduce our dependency on foreign oil we've got to have resources in America that are going to replace the foreign oil.

And so I said, let the light duty go to the battery, and then I said, the heavy duty go to natural gas. And I said, we can work this thing down. I said, in five years we can have it down 30 percent. And in 10 years, I said, we can have it down -- I think we can have the Mid-East clear out of the picture, at that point, in 10 years.

He started making those speeches, and if you remember what he said on energy, he said in 10 years we are not going to be importing any oil from the Mid-East or Venezuela.

SESNO: Do you think that --

PICKENS: I think that came from that --

(Cross talk.)

SESNO: You think it's credible that this country, with those -- with this number of cars, with all the stops and starts, frankly, that we've made on our energy policy and energy consumption and alternatives over all the years -- can completely turn off the spigot on Middle Eastern oil in a decade?

PICKENS: Yeah, I do. I think you can --

SESNO: And there are -- and there are those, Boone, and you know this, who say that doesn't matter because, you know, if we turn it off, somebody else turns it on.

PICKENS: Well, who cares? Oh, you mean turns it on to us?

SESNO: No, no, no, that energy consumption is energy consumption; and unless this is happening globally that, you know, you're just as dependent -- but somebody else is dependent and it's still a geostrategic --

PICKENS: Well, that's their problem.

The minister of energy was in here -- had a meeting set up for a month at the Hay-Adams with me on Saturday, from Holland. And she came in and we talked, and when we came around to questions, well she said, "What are you doing?" (Laughter.) And I said, "me?" And she said, "Yes, you."

I said, I'm trying to get off of foreign oil. We want the oil from Canada and Mexico, but, I mean, that's okay, North American oil is fine. But, I said, I'm trying to get off of foreign oil from Africa, the Mid-East and Venezuela.

And she said, "You know that we imported 100 percent of our oil 10 years ago." She said, "We imported it from the Mid-East." She said, "We import zero now." And -- can they do it? They did it. Can we do it? Of course we can.

Let me tell you the way it would unfold. We have plenty of natural gas to do what I want to do. What will happen is natural gas will dribble down into the light duty -- your car, my car. I drive a Honda GX Civic, which is a natural gas car. And I have a --

SESNO: You drive a Honda Civic?

PICKENS: Mm-hmm.

SESNO: Okay.

PICKENS: Impressive, isn't it?

SESNO: It is. (Laughs.) New, or used, or -- (laughter). What -- you know, leather interior, I mean -- (laughter).

PICKENS: No, but it has a -- it's wrapped on the outside with the PickensPlan.com. (Laughter.) But, it's a commuter car, is what it is. Now, it has a weakness to it, and I'm not -- I'll give you that at the conclusion --

SESNO: Okay. (Laughs.)

PICKENS: -- telling you about the -- my commuter car, that it -- I have a device called a "fill", which goes -- it's hooked onto my gas line in my garage. And so at night I just plug it in and it fills. So the next morning it costs me $1 a gallon to do that and it's the natural gas in my home. Same with -- I cook my, you know, food with and heat the house.

So anyway, that vehicle is not to get in and go to Chicago in from Dallas. It's to be used there pretty close by. What's the range -- 200 miles. So if I have a 100-mile commute out and back, well, you know, I just fill it up again at night. I don't have -- that's the weakness to my story. I live less than a mile from the office. And I told the story in Austin the other day and some guy in the back of the room said, "Hell! Why don't you just walk?" (Laughter.)

SESNO: To which you replied?

PICKENS: Well, I thought, I don't think I'll tell the story again, but I did, because it did -- because it had a funny part to it. But I do exercise and I could walk, but I have to cross Loop 12 and I'd just as soon drive. (Laughter.)

SESNO: Because you have this remarkable perspective on this, I want to ask this: Since we're talking about transportation and transportation fuels, you know, when I was out at the energy labs I drove the hydrogen vehicle, which is lovely if you want a gallon-and-a-half of hydrogen in the car and pay $1 million for the vehicle right now. It'll be a few years before --

PICKENS: Mm-hmm. (In agreement.) I bet you feel good about yourself.

SESNO: I did feel really, really good. You're right. I felt even better when I drove the plug-in hybrid and the lithium-ion battery that they're working on there that will deliver 40 miles before it needs a recharge, according to where they are right now, but it adds an extra $10,000 at the current time to the cost to the vehicle.

PICKENS: But do you know who has the most advanced technology on the lithium battery -- the Chinese. So we could go from our dependency on oil from the Middle East to a dependency on a lithium battery to China.

SESNO: You see that as a good tradeoff?

PICKENS: Ha -- that's a horrible tradeoff!

SESNO: So in all the conversation about we can go plug-in hybrid; we can go ethanol; there's cellulosic ethanol; well, down the road there's hydrogen. What do you see the future as in terms of --

PICKENS: The way it's going to unfold is we're going to -- people in America now understand about energy. And my wife, in the middle of the night -- I told her, I said, Madeleine, I'm going -- somebody's got to do something about the American people not understanding energy. And I said, somehow at 80 years old I think it's fallen on me to do that. And I said, what do you think? And she said, baby, I think you can do it, but do it tomorrow, not tonight. (Laughter.)

And so I did. I put together the team and we committed the $58 million.

SESNO: You have a website. You have an army -- you talk to the army online. You have a new ad that you're running here in the Washington market and elsewhere.

What are you trying to get people to do and are they doing whatever it is that you want them to do?

PICKENS: Well, from our polling, everything came out pretty well like I had it figured. Is that the American people did not believe they were being told the truth from Washington. That was not the case. It's that the truth was not known in Washington. The politicians did not understand energy in America.

SESNO: People thought -- the public thinks that the politicians don't lie.

PICKENS: They thought they were lying.

SESNO: They thought they were lying?

PICKENS: Yeah. And they weren't lying. They didn't know is what it was, I know because I'm in touch with them. And if you had taken Senator Obama and McCain and say they were kind of normal senators on energy, and yet had given them a little test, both would have flunked. They just honestly didn't know and they didn't know the seriousness of what we were faced with -- the people in this country -- so I said, I'm going to go tell them.

And now what's happened, I've had 20 million people come in a website and have 1.5 million people signed up. But I'm pretty well convinced that I am now in touch with every place, because of the people that contact me and everything else. I think I'm in touch with 20 or 25 million people.

SESNO: Really?

PICKENS: I do. I really do. But see, that brings in the American Lung Association, because the fuel's clean. It brings in Sierra Club, because they like the green part to it. It brings in the wind people and you know, I've got all -- who else do I have?

MS. : (Off mike.)

PICKENS: I've got this room. (Laughter.)

But you're concerned. You're interested. You're sitting here listening to the story and what's going to come out of it is, I'm going to -- how it's going to work out is one, you're going to believe I know what I'm talking about. You're going to believe I'm a sincere America. I don't have anything to gain from this and it's costing me a lot of money to tell you the story.

And the way it's going to unfold is you're going to use your resources to get out of the trap that we're in. And the key resource is natural gas. How long is it good for -- 20 or 30 years. So now the final chapter I'll be gone for that, because the 20 or 30 years natural gas, you're going to then go to the battery or to hydrogen fuel cell, whatever. But the next generation of transportation fuel is yet to be determined, but it will be before we exhaust what natural gas we have to be able to use in these large volumes.

But you know, if you look at it, all of us in this room are going to live in the hydrocarbon era. The hydrocarbon era started with the automobile in about 1900. There's -- I think there's less than 3 trillion barrels of oil that's extractable at -- on a conventional basis from -- the reason I'm qualifying this is because of the oil shale on the western slope of the Rocky Mountains. That is oil that could be available to you at $300 or $400 a barrel.

SESNO: Three or four-hundred-dollars a barrel?

PICKENS: Yeah. So it's --

SESNO: And the other costs associated with it, because it would -- there are many who argue that environmentally and other ways it's a very costly -- very costly fuel to extract.

PICKENS: Exactly. It's not like the oil sand up in Fort McMurray in northern Alberta. It's vastly different than that. But I think you've got 2 trillion barrels at this point that you know you have. But 1 trillion has been used.

Now, of course the first 50 years of using oil in America was pretty slow and it accelerated pretty fast. And so when you went to 2000, you had used 1 trillion.

Now, the other trillion barrels that I think is available to you is going to be used very fast and by 2050 you will be into another transportation fuel and life will be vastly different than it is today in America.

SESNO: This is the Council on Foreign Relations, so let's talk for a few minutes about what you think this energy shift that you're trying to put see through and encourage, what impact that would have on global relations.

You point out, every time you talk about this issue, that one of the key elements is the types of regimes that produce the world's oil. Many of them are rogues, rascals or otherwise unfriendly places.

How do you see, then, this shift way, which moves in fits and starts, right? It's easy to do when gasoline is $4.65 a gallon, but suddenly it's down to 2 bucks again and we're buying --

PICKENS: But you're still importing the same --

SESNO: Still importing, but it becomes harder to move away from those imports and do some of these things when prices come down for any number of reasons.

PICKENS: Historically that's been the case, but because of what I've spent and the people I'm in touch with, that's not so. The American people now want an energy plan.

SESNO: If we're at the tipping point in the American people want and what they're going to get --

PICKENS: Am I reading it right is the question, you know?

SESNO: And it's the question we all ask. But in terms of global relations, in terms of the role that these energy producers -- whether it's Russia or Saudi Arabia or Venezuela -- play, what happens to them? How desperate do they get? What happens to oil prices as this shift takes place, because they're not going to take it lying down.

PICKENS: Well, I was at the Democrat convention -- and that's a true story that will surprise a lot of people, that I was at a Democrat convention. It was my first time ever, but I was selling my plan and I said it's totally nonpartisan and I'm out of the presidential race at that point.

And told Harry Reid -- we talked in his office and he said, I consider you to be an honorable person. I know you're trustworthy. If you tell me you're out, you're out and you're working on a nonpartisan issue. I want to help you. And since then, Harry Reid and I have become very good friends. And so I'm out of politics.

And at that convention -- my wife was born in Kirkuk, Iraq and her mother's Lebanese, her father was English and she has friends in the Mid East. And so at that convention, they knew we were there and she got a call and we were getting ready to leave. It was the afternoon -- I didn't want to stay for all of it and so we were going to leave in the afternoon about 2:00. And she said they want us to go to dinner with them -- friends from the Mid East. And so I said, well, let's go and leave after dinner. And so we do.

And they had a really nice dining room -- yeah, a dining room -- private and everything so we can talk -- God, that place was loud! Every place I went had too many people there. Denver is not a good place to have a convention like that. It's way too small. And so we were -- you know, it was crowded getting in there. I though, God, how am I going to get in here? And I don't hear that well and I knew the people we were going to talk to had accents and I thought, Hell, I never will hear! (Laughter.) Well, serious! You know you struggle all through the evening, you know, and you hate to keep asking people to repeat. But they had a really nice dining room -- you can see this, can't you? You're not old enough. You don't have hearing aids, but Frank, listen to you, because I know what I'm talking about, because you will be here some day.

And so anyway, here we are in this nice quiet room and all glassed in. You can see all this crazy activity going on outside the room, but we got pretty concentrated on this conversation. And what it came down to is that -- what really are you doing? Was the question to me. I said, what am I doing? They said, on your Pickens Plan, what?

I said, I'm trying to get off of oil that comes from areas around the world that are really not friendly to us. And this was one of the countries that considered themselves in this meeting that they were friendly. And so they wanted to know. And they were very interested in talking to me and all. They said, what we would like you to do is to come to our country and build a big wind farm.

Me go to the Mid East and build a wind farm. You think about that!

SESNO: Who was saying this to you?

PICKENS: I'm not going to reveal who it was. I'm telling you it was a major producer of oil from the Mid East. And the ambassador was sitting there.

SESNO: Okay.

PICKENS: So we talked further. And I thought I go to the Mid East so the Pickens doesn't go forward here and I will be over there doing a huge wind farm and they're going to help me do it.

It was a lot like green mail. You remember those days? But I didn't hear enough of it, to say that I could give a sworn statement it was green mail, but they were interested in doing business with me, but they wanted me to do business ins the Mid East, which I told them I had no interest in that.

And so when we got to the car, one of their people walked out and said to Madelyn, said, we have money running out our ears. And that was pretty clear. I mean, I know what that looks like. And so -- (laughter) -- but the point is, they were concerned about what I wanted to do. The question was, could I get it done? And they wanted to see if I was real, if I knew what I was talking about and whether I financed to the point that I could spend the money to tell the story and have somebody accept the story.

And I don't know -- we never had another meeting after that, so I don't know really how they sized it up, but I was not interested in what they were talking about that they wanted met to do.

The point is, what are they going to do if -- the only way, Frank, that you have any chance of getting control of your energy destiny is you are going to have to get on your own resource. Otherwise, you are completely captured at this point.

If you go back and look at 40 years back, we've never had an energy plan in America -- never. Why? Well, you could say you didn't have any leadership, but you had cheap oil. And so the leadership we had never was strong enough to say we can't continue to import oil at greater and greater levels.

In 1991, the Gulf War, it went over 50 percent. And so I started making speeches in the early '90s and the price of oil was cheap. And so people said, you know, what you say really makes a lot of sense. But when it went to 4.11 -- the day I announced here in Washington, that was the day that people said -- they'd been watching it climb -- now you're up to $147 a barrel and they're saying, could this be real?

SESNO: We were writing about $200-a-barrel oil at that point.

PICKENS: Oh, sure you were, because you know, you're trying to get ahead of what's going to happen and be smart. And so 200, 300 (dollars) whatever. You're going to see $200 or $300 a barrel. I promise you that you are. That is where you're heading. I mean, they have prepared you. If you just listen to them, every time they talk, listen to what they say, because they are not trying to scare you. They are telling you what they're going to do.

And when you saw Ali Al-Naimi, the oil minister from Saudi Arabia on "60 Minutes" the other day, he said: We have to have $75 a barrel. What he's talking about is the OPEC countries have to have it, because some are not as financially well off as others. But they're going to get $75 and all they have to do is cut down the supply. There's 85 million barrels in the world and that's about it. That's kind of blood, guts and feathers of the oil production in the world -- 85 million barrels.

And somebody said, well, you can do this and that and you could get up to 95 million barrels. You can say that, but when you get down to it, see, 85 million is now declining at the rate of 8 percent a year. So every year you have to put back seven to get to 85. And I don't know where this oil's going to come from that people keep adding in that's going to happen.

I mean, there are projections that the world's going to need 130 million barrels of oil by 2015. It doesn't make any difference. That can't happen, because the oil is not available.

SESNO: We come to the point now, Boone, in the conversation where I'd like to invite council members to join the conversation and discussion.

So if you'd wait for the microphone and speak directly into it; please stand, state your name and your affiliation. And we'd like to ask you to keep your comments and your questions as concise as possible to allow us to move around this very crowded room.

PICKENS: Okay, while they're moving to that, let me add one thing.

You haven't had an energy plan for 40 years. Say we don't have one and we go 10 years forward, this is where you'll be: You're going to be importing 75 percent and you're going to be paying $200 to $300 a barrel for it. That's exactly where you're headed.

SESNO: So Pickens prediction to go to the questions.

Let's start with this lady right here.

QUESTIONER: Hi.

SESNO: Please stand and tell us your name and affiliation.

QUESTIONER: My name is Maddie Babb (sp) and I'm with Jennings -- (inaudible).

I share, and I imagine everybody in this room shares your interest in energy security. But we've listened now to this Pickens plan -- I'm one of the 25 million people who goes onto your website -- and I'm curious why the issue of climate change never passes your lips, because the -- or it hasn't this evening.

And the army of people you hope to support your plan, I think, would be very compelling to people who get up in the morning worried about climate change perhaps even more than they worry about energy security.

PICKENS: Okay. Climate change is not something that's going to -- what it -- the consequences of climate change you're not going to see Monday morning. It's going to be a creeping change.

And I'm one of the few geologists in this country that believes climate change is real, because they can clearly show you that they've had millions and millions of years of drought, millions and millions years of ice -- you know what I mean. And you're just in one of those periods and you haven't -- you know, just a few years have passed and all. But I don't agree with that.

But my point is -- and I had -- oh, God, it was -- well, it was earlier this month. It was two weeks ago in Houston. And here I am with these geologists that are my age or older and they are, you know, you have lost your mind, Boone, you know, that you believe in climate change. Don't even embarrass yourself by saying that.

And I said, okay, if we take whatever precautions at this point and we do accept climate change, I said everything that you do -- whether you've wasted your time or your money -- has not hurt you, but it could help you. And I said, I'm not going to wait until the bus runs over me. I'm going to get out of the way is the way this is going to work. And this is -- we need to go, you know, to start to move as if we are having climate change and we're going to suffer the consequences.

But let me go back -- you're asking me why don't you put the two together? That's exactly what Al Gore asked me. Al Gore and I have become pen pals. And I sat next to him here yesterday. I sat next to Al Gore and next to Secretary Chu -- two Nobel winners -- and I asked for them to be sure they got a picture of me and I wanted to send that to the faculty at Oklahoma State University to show them who I hung out with.

SESNO: Are you still tangling for that tenured position? (Laughs.)

PICKENS: Yeah, I'm going for the tenure. But what -- and what I told Al the first time we talked about this, I said, Al, look, I believe in climate change but I said, for me, I'm after two things, and that's page one for me. One is the security for America to get off foreign oil from the enemy, okay; and two is our economy. Everything we can recapture, the 400 billion (dollars) that we spent last year on oil, that whatever we get back means jobs for us, profits, taxes and the economy moves forward. But when we have 400 billion (dollars) go out of the country, and that was at $147 a barrel, you are going to spend $700 billion on foreign oil.

Now, we didn't have -- our whole year didn't look like that, so I think it was 4 (hundred billion dollars) or 500 billion (dollars) that went out. But what you're going to have happen, they're going to move the price up on you. And let me give you this comparison. Five years ago, OPEC was -- their revenues from all around the world for the sale of their oil was 250 billion (dollars); last year it was 1.250 trillion (dollars). The price will move up. You will be looking at 2 (hundred dollars) to $300 a barrel in 10 years, and you'll be importing 75 percent of your oil.

SESNO: Let's go to the next question. Let's go to this gentleman here, and then we'll come over to the front row.

QUESTIONER: (Inaudible) -- capital partners. And tonight we've talked primarily about the supply side. I'm interested in the demand side, and not just from the transportation sector and CAFE standards but buildings and appliances and what sort of role that can play, especially from an investor such as yourself when it seems to me that there's some real private sector gains there made by investment in those sort of technologies or existing products.

PICKENS: You're talking about conservation?

QUESTIONER: Energy efficiency, primarily.

PICKENS: Okay. We've got to have it. I mean, all that's got to be understand, and you've got to have a leader, and I hope Obama is that leader, that he can stand up in front of the American people and say, this is what we're up against and this is the solution, and I'm going to report back to you monthly. And the way it goes is every month we're going to look at how much oil we are importing and see what's the curve turndown and enjoy the results together.

It has nothing to do with politics. It's Americans working together on a problem very similar to war. And efficiency will be a big part of that. There's no question we can be more efficient, but that direction will come from the president. Maybe he doesn't set out the 10 things we're going to do, he tells you that Frank's going to give you the 10 things, and he's going to help you. (Scattered laughter.)

But you know what I mean. He'll give you an expert. And we will become very, very interested in what's going on and how we can help ourselves. But efficiency is a big part of what I'm talking about.

SESNO: Let's come to the front here, please.

QUESTIONER: Hi. I'm Steve Charnovitz from George Washington University Law School. Thank you for coming and for your leadership. I want to probe the role of energy independence, or what you called energy destiny or energy security, with respect to energy policy. And everyone would agree, I think, we need an energy policy for supply and price and solution and climate issues. You're saying also energy independence.

And tonight you said, well, Canada and Mexico are okay, they're North America, but you don't want to import energy from our enemies. So here's my question. If Nixon had succeeded back in the early '70s with the energy independence that he promised and America had control all these decades of its energy destiny, how would history have been different?

PICKENS: Well, history would've been different this way is that -- we would -- I think a great part of our lost credibility globally is that around the world they view us as a little bit stupid that we would sit here with resources at home and rely on the enemy's resources. And they wonder when it's going to happen to us like Russia did to Europe this winter when they cut off the gas and negotiated on their knees with the Russians to turn the gas back on -- we're cold, and we'll pay for it. That we're going to find ourselves in the same spot.

And the recession, in a lot of ways, actually helped us gain time because the OPEC nations have spent a tremendous amount of money and they have found themselves in a financial predicament, too. And that's one reason why they have to raise the price on us as quickly as they do. But they're going to go back to -- we'll be $75 by the end of the year.

And so -- but what would've changed in history had we gotten control and held onto it? Our energy -- at the point of 1970, we actually didn't have enough natural -- we didn't know we had enough natural gas to save ourselves at that point. That's occurred in the last 10 years. So that's just a small point.

But let's just say you were able to. I think that our credibility would be vastly different today because I think we're seen as really, you know, a big gorilla with a soft, soft spot that could be triggered anytime that they decide to do it to us.

You know, Georgetown is where we launched our first -- did you go to our town hall meeting there?

QUESTIONER: No, sir. I didn't.

PICKENS: We had our first town hall meeting at Georgetown. And we get tremendous support from young people because I pass off to them. I say, hey, look, this really is your responsibility more than it is mine. I can get -- at 80-years old, I can get to the finish line, but you can't. And the future generations, my children and grandchildren and all -- they're so tired to hearing this speech at the dinner table. They say ee're onboard, Papa, we're onboard.

SESNO: (Laughs.) Okay. Let's go to this gentleman here on the aisle, then we'll come back over to the other side.

QUESTIONER: Alan Wendt (ph). Mr. Pickens, you said there are at least 1 trillion barrels of oil still available in the world. And you also postulated a significant increase in the price, 175 (dollars), $200 a barrel. Is that not simply going to trigger that much more supply, which will eventually then drive down the price of oil, as we've seen recently? In other words, how do you get out of this vicious circle given the real efficiency and usefulness of oil for the internal combustion engine and the great dependence of this country on automobile transportation?

PICKENS: Well, go back and look at the last time there was a billion-barrel oil field found in the world, and you would tell me Tupi in offshore Brazil, which they now rank as 8 billion. Now tell me when the one before Tupi was found, and you will see when you step down, when billion-barrel oil fields were found, they've mostly all been found, I think. And so I know your question is, all you have to do is throw more money at it and we'll find more oil. I say the big oil fields have been found and that is not the way it'll unfold.

So I think you've peaked at 85 million barrels. You can't get anymore out of the world than that. And so then you start to look at demand. And when you saw the demand in the fourth quarter of 2008 predicted to be 87 million barrels a day, well, 85 (million) won't cover 87 (million). Now, there's inventoried oil around different places and -- so the system can handle -- 85 (million) can handle 87 (million) for a while.

But then you went into just at the time that you were getting ready to find out how long you could handle 87 (million), the world went into a recession, and now the demand's dropped down to probably 83.5 (million). And so here you are, you still have 85 (million), and you've got too much oil around so the price falls $100 a barrel. Very convenient.

What did that do for the world? Well, it was about the biggest stimulus you could've possibly given the world. It was $3.2 trillion that was just plugged in at just the difference in 147 (dollars) and $37 for the oil. So I don't believe -- in answer to your question, I don't think the oil is there. I don't think you can get it.

And you see a company like Exxon that has, you know, 30 (billion dollars) to $40 billion in cash sitting there, buying their own stock back at 20 (billion dollars) or $30 billion a year, what's that all about? They don't have anyplace to drill is what it is. They cannot get places to drill. Around the world, they can't -- you used to. You know, you could get concessions. It's extremely difficult now. Any country that is financial able, they're going to probably have a state-owned oil company. And 70 percent of all the oil today is in the hands of state-owned oil companies.

And Exxon, for instance, have reserved in the world -- and probably 75 percent of the reserves is foreign -- they have 2.5 percent of the reserves in the world. And you know, you have these Senate hearings, and you guys sitting up there. And I think their pride is so big they will not say, hey, look, don't call me up here, call some of these people up here that have a lot of oil. We only have 2.5 percent of all the oil in the world. I think they'd rather go in and get their ass kicked around than they would to say, we don't have much oil.

SESNO: Let's see, let's go --

QUESTIONER: Yes, sir, Mr. Pickens. First of all, I want to thank you for what you do and what you represent. Gary Miller, American patriot. My question is, do you see that oil will be the spark, no pun intended, for world instability, and those who create their own energy policy and are energy dependent (sic) will be able to withdraw themselves from that? This is more than a luxury, it's a necessity. And would you see that this is tied to national security?

PICKENS: Well, there's no question. Number one for me is national security. And we have to get -- something has to change. We cannot continue like we are now. What you're getting ready to come up on -- we get about 2 million barrels a day from Canada and 1.4 million from Mexico. And Mexico is in a decline like this, and Mexico is out of oil. They will be a net importer in five years. So that 1,400,000 barrels has got to come from someplace else if we continue on the same track. There's only one place it can come from is from OPEC.

And two, Venezuela has made a deal with the Chinese. And when the Chinese can process the low-grade, high-sulfur crude out of Venezuela, when they can process that in their refineries, that 1 million barrels a day is going to go to China. So there's 2.4 million barrels that we have to replace. We're importing 12 million barrels a day. So you're going to be, at that point, you're going to have 20 percent of your oil will have gone away, and you're going to have to get it someplace else.

So what happens is it truly is like a treadmill. I mean, they just turn it up from 4.0 to 6.0 to 7.0, you're running faster and faster all the time. And you know, you're going to run out of gas pretty quick is the way it's going to go. You can't continue to run at the pace we're going to have to run.

QUESTIONER: May I just follow up on that? You mentioned China, and it's something that's worth pausing and just clarifying for a moment and getting your thoughts on this because one of the things that China is doing, as we know, is trying to enter into long-term contracts with producers from Venezuela to Nigeria and beyond. What impact is that going to have on this sort of global scenario and energy scenario that you've laid out given China's growth? Even with the slowdown, China's growth and the numbers there --

PICKENS: Well, China has money. And I wonder when they stop buying our debt and start buying resources with that. And two deals have been announced and a policy has been announced in the last two weeks. One was $25 billion that China owed the Russians for 300,000 barrels a day for 20 years. Now, that's supposed to be paid back, but if it's not paid back, they bought the oil for $11.40 a barrel. And so I don't know. I mean, when you can't pay something back -- but I would suppose, at some point, that may be renegotiated because that's a pretty cushy deal.

And also, the Chinese announced that they were going to put more money into the national oil companies CNOOC and Sinopec, that they're going to put more money in them to buy resources around the world. And I'm trying to think of the third thing that they did. They loaned money to Petrobras in Brazil for a (call on ?) on oil. And so they're gathering it up as fast as they can go.

The United States does not have a state-owned oil company. So what happens is that you've got to get, you know, the politicians to understand fully who we're competing with and how the competition is growing. Right now, we're losing every ante. I mean, we never win. And so we continue to get further and further behind all the time.

SESNO: Let's go to a last question, and we'll go to this lady right here, front row. Hang on one second, there's a mike.

QUESTIONER: I'm Misty Worthline (ph), and I run something called the Energy Conversation. We just finished three years, funded by Defense. It's a month meeting to educate the Washington community about energy. I started out with the same objective you did. I'm struck by how complex this is. And in trying to tell the story, I think it is a story that needs to be told, visualization helps a lot.

PICKENS: What does?

QUESTIONER: Visualization, making a film. There was a wonderful four-minute film that was shown at Davos about the world water crisis. There were no words and just money and pictures. Have you considered getting someone to write a script that you could use to sort of give to the country so they could -- it's so complicated. I think if they don't get it visually it's just very hard to understand.

PICKENS: Well, from your position, you're telling me that it is complicated. From my position, it's pretty straightforward because I've been in the business for over 50 years. And so, you know, what I come down to is we must replace foreign oil with resources in America. Okay, that's where I come from.

Then I say, okay, list the resources. And I usually have a white board, and I go over there and I put up, you know, we've got some oil, 5 million barrels a day, we're using 21 million. And then I come down to the next one is natural gas, coal, hydro, wind, solar, nuclear, geothermal, biofuels. And then I come down with a list of about 11 or 12. That's it. We don't have anymore than that.

So I say, okay, now, I'm going to replace foreign oil. What do I have to replace with? I've got my own oil. So I say, okay, let's drill the OCS, East Coast, West Coast and eastern Gulf of Mexico and throw in ANWR. Those are the four areas that are connected to us where we could get some oil. How much oil could we get? I would feel we were very, very fortunate, out of all that, that we could get 2 million barrels a day -- (inaudible). I was quoted on that a month ago, and I got a call from -- (inaudible) -- and George Attell (ph) in Houston who are consulting engineers. And they said, you want our quote? And I said, yeah. I said, all right, we're going to get 2 million barrels out of it. I said, I would be pleasantly surprised if I got 2 million barrels. They said, well, we will be pleasantly surprised if we got 30,000 barrels. Now, that's scary, that's scary. But I would say you're probably closer to 30,000 than you are 2 million.

But let me tell you another point here. People have the idea that ANWR on the Arctic Coastal Plain is the answer to America's energy problems. The Arctic Coastal Plain has one pipeline, and it carries 2 million barrels of oil from Deadhorse to Valdez. That's all. There's not going to be another oil pipeline out of Alaska. That's it. So 2 million barrels is all you can get from Alaska down to Valdez. Now, maybe you can get 2 million barrels for 100 years, that would be fine, but you're not going to solve the problem off the Arctic Coastal Plain. It isn't there.

And I met with Sarah Palin when she announced running for vice president. And she said she would like to have a meeting with me about energy. And she came to Dallas, and we met. I think she had a fundraiser and happened to be in Dallas. But she was in Dallas, and she asked for a meeting. Anyway, she came by, it was an hour and a half meeting. Sarah Palin knows more about energy than either Senator Obama, now president, and Senator McCain. Why? Because she's in a state where it's all oil, it's all they talk about. And she was in the regulatory department and then governor. But she only knows Alaska. And she said, you are way too conservative on the reserves we have in Alaska. I think that if you got 4 billion barrels out of ANWR you'd be damn lucky. That's reserves. She said, I think there's 20 billion. And I said, you're the governor, I'm the geologist. (Laughter.)

SESNO: Draw your own conclusion. (Laughs.)

PICKENS: And I said, you say you're going to get 2 (hundred trillion) or 300 trillion cubic feet of gas. Where from? And she said, in the Beaufort Sea. I said, how much do you have so far? She said, not anything yet, but I think it's there. I said, you're the governor.

And so Alaska does not have near the oil and gas that we hope that it would have. But I hear what you're saying. Would I get somebody to do something for me? I think I can do it for myself. I mean, I don't need anybody to do it. Maybe I need them to do a film and everything else, if that's what you're saying.

QUESTIONER: (Off mike.)

PICKENS: Yeah. But I think it's --

QUESTIONER: (Off mike) -- great story, but not everybody gets it by just hearing the words. Visualization can help -- (inaudible).

PICKENS: It can help, you're exactly right. But remember this, we have to get on our own resources. That makes sense, doesn't it?

SESNO: That's the story.

PICKENS: It is. We've got to get on our --

SESNO: I would like to mention one thing, if I may, before we part, and it's a personal note, if I may, and it's one of the reasons that I'm so thrilled to be here having this conversation. I think you're right about telling the story. I think you're right about visualizing.

I also think you're right about invoking the army and having this go out to people. I'm working over at George Washington University on a project that we're calling "Planet Forward." If you go to planetforward.org you'll see a little something now. But what this is going to be is this is going to be stories from across the country, from experts and citizens alike, as to what they think and what they're living and what they're doing to bring about and to imagine the future of energy. It all is going to start online. We're going to have people rate it. It's going to be before a panel. Maybe even Boone Pickens is going to join us.

PICKENS: I will if you ask me to.

SESNO: I just asked you to.

PICKENS: Okay, I'll be glad to, sure.

SESNO: And then it's going to be a nationally broadcast special on public television. We're reaching out through the stations to many of the local stations to involve local communities to try to make this something that can go from the bottom up and then back down again because we have been for these 40 years without an energy policy.

PICKENS: Exactly.

SESNO: We are out of time now. And what you're doing is a tremendous national service, and it's pushing the debate. And it's been an amazing pleasure to be here. Our website, planetforward.org, actually goes live on the 6th of March. And if you or people you know have ideas about what we should be doing on conservation and other things, we'll take those videos. And those videos and other things will be there for other people to see and experience. We've got some experts, too. So I'm very excited about this. And I'm hoping that maybe together we can get --

PICKENS: I'll help in any way I can.

SESNO: All right. It's been a great pleasure to have Boone Pickens and all of you. Thank you, all, very, very much. (Applause.)

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